US Stock Markets Extend Winning Streak 

On Friday, August 16, 2024, US stock market ended the day slightly higher, extending their winning streak to a seventh consecutive day. The major indices, including the Dow Jones Industrial Average, S&P 500, and Nasdaq Composite, all posted modest gains.    

Tech Stocks Drive Biggest Weekly Gains of 2024 

This positive performance helped solidify a strong week for US equities. The S&P 500 and Nasdaq recorded their biggest weekly percentage gains of the year, fueled by a rally in tech stocks. The S&P 500 Information Technology sector surged 7.51%, marking its best weekly gain since early November 2022. 

Factors Behind the Market Optimism 

Several factors contributed to the market’s optimism: 

• Positive Economic Data: Strong retail sales and labor market indicators, helped alleviate recession concerns.  

• Easing Treasury Yields: Lower yields provided a supportive backdrop for stocks, boosting investor confidence.    

All Eyes on Jackson Hole: What to Expect from Powell 

Investors are now turning their attention to the upcoming Jackson Hole Economic Symposium, where Federal Reserve Chair Jerome Powell is scheduled to deliver a speech. His comments on monetary policy will be closely watched by market participants.    

Weekly Performance Recap 

For the week: 

• The S&P 500 climbed +3.9%. 

• The Nasdaq Composite gained +5.3%. 

• The blue-chip Dow added +2.9%. 

Friday’s Closing Levels:  

Market Resilience and Future Trends 

The resilience in the market is truly remarkable. After the panic selling the previous Monday, the market has rebounded significantly and is now just a whisker away from making new highs. 

Even the most bullish investors are probably surprised at this bounce. Technical analysts who had predicted a second leg down are now reevaluating their positions, as the charts provide little clear direction. 

It seems that recession fears triggered the “Black Monday”, but since then, most economic data has pointed toward a soft landing, which the market has embraced. We’ve gone from being oversold to potentially overbought. 

While a retracement seems likely, the market’s continued strength throughout the week suggests it might push higher without a significant pullback. However, I would encourage any long positions to take advantage of the low volatility to buy some protection. 

What’s Next After Jackson Hole? Market Predictions 

The only thing that could derail the market at the Jackson Hole symposium would be Jerome Powell expressing serious concerns about a recession, which seems unlikely at this moment. Any hints at a 25bps or 50bps rate cut are likely already priced in and would have little impact. 

With the trend now back on an upward trajectory and market flows supporting the uptrend, the possibility of a long-awaited pullback remains. However, given the market’s current strength, it seems less likely—but it’s always wise to be prepared. 

Source: CBOE, Bloomberg 

This commentary is written by James Gomes, a seasoned finance industry veteran with extensive experience of over 30 years, including a substantial tenure at a reputable US bank exceeding 20 years. 

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Disclaimer
This information contained in this blog is for general reference only and is not intended as investment advice, a recommendation, an offer, or an invitation to buy or sell any financial instruments. It does not consider any specific recipient’s investment objectives or financial situation. Past performance references are not reliable indicators of future performance. Doo Prime and its affiliates make no representations or warranties about the accuracy or completeness of this information and accept no liability for any losses or damages resulting from its use or from any investments made based on it. 
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